New rules restricting the use of cash have been introduced and serve as an additional tool for Malta to ensure that crime doesn’t pay off.
The regulations are part of Malta’s growing set of tools used by the FIAU and other agencies to combat money laundering and other crime. Every company is guided by international standards and various EU directives as it tries not only to block and punish criminals through prosecution, but also to ensure that by confiscating their assets they do not benefit from the crimes they have committed can .
The Cash Use Regulations (Restrictions), which are the responsibility of the FIAU to implement and monitor, are one such means of reducing the potential of people enjoying their illegal cash.
The regulations see a limit of €9,999 on cash purchases, which are considered the riskiest in terms of attracting illegal funds. These are real estate, antiques, jewelry, precious metals, gemstones and pearls, automobiles, ship art and works of art. The rules were recommended as Malta still has a large cash-based economy and therefore faces a higher risk of money laundering from the use of cash.
There are cash limits in other EU countries; Greece, for example, limits cash purchases to only €500, while France limits such purchases to limits €1,000. Most EU countries are sensitive to the use of cash and the risks involved, which has led to a wider discussion in the EU as to whether such restrictions should be mandatory across the EU.
Indeed, EU Finance Commissioner Mairead McGuiness said in May that the Commission intends to come up with new anti-money laundering proposals, including an EU-wide ban on cash payments of € 10,000.
The ultimate purpose of such regulations is to ensure that criminals do not have the proceeds from every crime they have committed. In particular, taking into account the type of crime in question, such as drug trafficking, human trafficking, arms trafficking, corruption, fraud, extortion, robbery, murder, tax offenses such as tax evasion and VAT fraud, and misappropriation of state funds and assets. A list of crimes well placed to undermine the very foundations of any economy and society.
To enjoy the proceeds from such crimes, criminals must “clean up” their ill-gotten gains and make them appear legitimate. That is essentially money laundering. Illegal funds can be hidden by investing in legitimate businesses, investing in real estate, spending on high quality luxury goods, or just somewhere else.
It is precisely for this reason that the FIAU’s role in the fight against money laundering and the financing of terrorism is vital to function as one of the many gatekeepers working to contain the tide. In addition to the legal framework, the functions of the FIAU are the most important basis for these efforts.
For example, the Intelligence Analysis function of the FIAU works to obtain, collect, analyze and make available to the police information on reasonable suspicions of money laundering and the proceeds of crime – information that is then used for ongoing criminal investigations and subsequent prosecutions to trigger or contribute to it.
The FIAU also provides information to the Commissioner for Revenue, other competent authorities and foreign FIUs. All of this is done to help identify the proceeds of crime, prevent money laundering and ultimately ensure that criminals are punished and their proceeds from crime are confiscated.
Specialized analysis software, access to various databases such as the register of beneficial owners and the central bank account register, cooperation and the exchange of information with other authorities and foreign FIUs as well as the FIAU’s statutory powers to request information are the FIAU’s primary tools for collecting and information Analysis of information that is then used for investigations.
The FIAU’s Supervision, Enforcement and Guidance & Outreach functions are then aimed at those financial and non-financial companies and professions, also known as subjects, who have obligations to combat money laundering. The FIAU has the task of ensuring that they are aware of and comply with their legal obligations to ensure that they are doing their part in preventing money laundering and thus making it more difficult for criminals to access their ill-gotten assets.
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